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WHAT ARE WE LOOKING FOR?

Opportunities among clean technology and alternative energy stocks.

U.S. president Barack Obama has said he is determined to retool the U.S. energy sector by reducing its reliance on fossil fuels. Capping and reducing carbon dioxide emissions by manufacturers and energy producers are key to his industrial strategy.

TODAY'S SCREEN

We looked at the companies in the PowerShares WilderHill Progressive Energy Portfolio exchange-traded fund (ETF). It is based on the WilderHill Progressive Energy Index composed of companies in transitional energy technologies, such as in improving the use of fossil fuels by progressively reducing carbon and other pollution. This is in contrast to zero carbon plays like solar and wind companies, which can be found in the PowerShares WilderHill Clean Energy Portfolio ETF.

The progressive energy ETF offers a mix of technologies that would certainly benefit from any carbon-cap or carbon tax legislation. Companies in the ETF focus on the following areas: alternative energy, better efficiency, emission reduction, new energy activity, greener utilities, innovative materials and energy storage.

The ETF, whose stock symbol is PUW on the New York Stock Exchange, concentrates mainly on U.S.-listed companies. It fell 14 cents (U.S.) yesterday to close at $18.72 a unit, up from $10.99 last November.

WHAT DID WE FIND?

Because earnings growth is what will drive interest in this sector, we used Thomson to screen for stocks with the strongest estimated earnings growth for the next fiscal year. There are quite a few of them. There are some stocks with price-earnings ratios in the low teens and under.

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Earnings estimates for members of the PowerShares WilderHill Progressive Energy Portfolio ETF
Company Ticker Country Price US$ June 15 1-mo % price chg This fiscal year EPS $ est. This fiscal year EPS gwth % This year P/E Next fiscal year EPS $ est. Next fiscal year EPS gwth % Next year P/E Dividend Yield (%) EPS 5-yr hist gwth
Koninklijke Phil PHG-N NL 18.09 -2.9 0.17 NA 106.4 1.16 582.4 15.6 4.1 10.3
Fuel Tech Inc FTEK-Q US 10.12 1.9 0.05 -66.1 198.8 0.33 560.0 30.7 NA -1.2
Johnson Controls JCI-N US 20.92 14.6 0.22 -90.6 95.9 1.24 467.1 16.9 2.4 17.4
PMFG Inc PMFG-Q US 7.68 31.1 0.09 -86.5 89.0 0.32 276.5 23.7 NA 24.2
GrafTech Intl GTI-N US 11.17 27.4 0.34 -83.5 32.4 1.03 197.8 10.9 NA 34.3
USEC Inc USU-N US 5.12 13.8 0.30 -15.2 17.3 0.67 124.7 7.7 NA -3.8
Headwaters HW-N US 4.44 16.5 0.25 -57.8 17.6 0.55 117.2 8.1 NA -4.8
Owens Corning OC-N US 10.98 -20.0 0.38 -67.5 28.9 0.78 105.8 14.0 NA -32.1
Cameco Corp CCJ-N CA 25.47 3.6 0.95 -39.2 26.9 1.73 82.6 14.7 0.7 36.2
Enersys ENS-N US 17.95 12.2 1.08 -45.6 16.7 1.79 66.2 10.0 NA 25.8
A-Power Energy APWR-Q US 9.97 -0.1 0.96 12.2 10.3 1.52 57.0 6.6 NA NA
Eaton ETN-N US 46.34 2.3 1.96 -71.3 23.7 3.06 56.4 15.1 4.1 12.0
Southwstn Energy SWN-N US 42.75 9.5 1.58 3.1 27.1 2.16 37.8 19.8 NA 38.6
EnergySolutions ES-N US 8.86 12.3 0.52 2.1 17.0 0.68 31.2 13.0 1.2 NA
McDermott Intl MDR-N US 21.14 14.4 1.51 -19.0 14.0 1.92 27.6 11.0 NA 44.8
Corning Inc. GLW-N US 15.45 11.3 1.00 -34.9 15.5 1.27 27.2 12.2 1.2 20.2
Baldor Elec BEZ-N US 24.00 12.2 1.33 -38.2 18.1 1.62 22.0 14.8 2.7 16.7
Covanta Holding CVA-N US 16.05 1.8 0.71 -21.0 22.6 0.85 19.0 18.9 NA -4.5
Esco Tech ESE-N US 42.53 12.2 1.89 5.1 22.5 2.23 18.1 19.0 NA 1.8
Computer Prg&Sys CPSI-Q US 39.36 20.5 1.54 7.9 25.5 1.78 15.6 22.1 4.0 17.9
FPL Group FPL-N US 56.75 4.2 4.22 9.8 13.5 4.75 12.6 12.0 3.4 13.7
Praxair PX-N US 71.27 1.1 4.01 -4.6 17.8 4.51 12.5 15.8 2.2 17.6
Chesapeake Energ CHK-N US 22.54 13.0 2.11 -40.5 10.7 2.37 12.4 9.5 1.3 14.3
National Grid NGG-N GB 44.68 0.7 3.71 -69.6 12.0 4.16 12.1 10.7 6.7 32.1
CEMIG CIG-N BR 13.80 8.2 1.19 -28.0 11.6 1.33 11.4 10.4 NA 11.3
* All figures in US$
Source: Thomson

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